Cameron rules out outsourcing curbs, but wants India to create jobs in UK
BANGALORE: On his first visit to India as the British prime minister, Conservative leader David Cameron allayed fears of any curbs on the IT outsourcing by the countrys government departments, even as he asked Indian companies to create more jobs in the UK.
Mr Cameron, who will meet Prime Minister Manmohan Singh in Delhi on Thursday, started his India trip by addressing executives and government officials at Infosys Technologies sprawling Bangalore campus on Wednesday. The gathering included Wipros billionaire chairman Azim Premji and Infosys founder NR Narayana Murthy.
You will find Britain one of the most open and progressive countries in terms of being open to outsourcing, said Mr Cameron when asked about whether his government would curb offshoring contracts with Indian IT companies such as Tata Consultancy Services (TCS).
Mr Cameron, who leads UKs Conservative-Liberal Democrat coalition government, which has imposed £100-million cap on all government IT contracts, said his government is still reviewing the contracts. He, however, added that Britain will review the outsourcing contracts as part of normal exercise.
We are reviewing contracts, we are looking at what we pay for the services we have received. It is like any other business, Mr Cameron said.
For Cameron, who plans to cut nearly $10 billion in government expenditure this year, outsourcing of non-core functions is a tough option, especially given the rising unemployment in the UK.
I think Mr Cameron would like British skills to contribute to the outsourcing deals that the major Indian outsourcers do in the UK, said Bob McDowall, senior research director at TowerGroup in the UK.
He does not want unemployment in the UK to increase as a result of off-shoring deals. Mr Cameron should be able to advise major Indian outsourcers how much of the broadly 25% cut in UK government spending will be delivered through outsourcing both on-shore and off-shore, Mr McDowall added.
Earlier this year, TCS had won around $800 million contract to manage UKs state pensions scheme from the Personal Accounts Delivery Authority (PADA). The Conservative party had voted against the auto enrolment legislation, which was part of the contract signed close to the elections.
The new political leadership with Conservative David Cameron at the helm has to deal with high unemployment rate of around 8% by creating more local jobs and, at the same time, cut the government spending by almost $10 billion this year.
It is a trade mission but I prefer to see it as my jobs mission, Mr Cameron said.
At a time when UKs top enterprises such as Vodafone, BT and Barclays are looking to increase their revenues from fast-growing lucrative markets such as India, improving bilateral trade is top on agenda for Mr Cameron.
The EU-India trade is worth £50 billion a year already, but the possibility is there for dramatic expansion. So lets seize it, he said.
Mr Cameron added that his government wants to improve the current annual trade worth $18 billion between the UK and India over next few years.
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